In a model of spatial competition, we analyse the equilibrium outcomes in markets where the product price is exogenous. Using an extended version of the Hotelling model, we assume that firms choose their locations and the quality of the product they supply. We derive the optimal price set by a welfarist regulator and find that this (second-best) price… (More)

We study the competitive effects of restricting direct access to secondary care by gatekeeping, focusing on the informational role of general practitioners (GPs). In the secondary care market there are two hospitals choosing quality and specialization. Patients, who are ex ante uninformed, can consult a GP to receive an (imperfect) diagnosis and obtain… (More)

(DFG) is gratefully acknowledged (SFB-TR 15). Errors are mine. Abstract This paper studies sabotage in tournaments with at least three contestants, where the contestants know each other well. Every contestant has an incentive to direct sabotage speci…cally against his most dangerous rival. In equilibrium, contestants who choose a higher productive e¤ort are… (More)

We use a model of horizontal and vertical differentiation to study physicians' incentives to provide quality in the physician-patient relationship under price regulation. If the price is the only regulatory variable, the social planner cannot implement the first-best policy. Moreover, the second-best policy is time inconsistent. Excess entry and first-best… (More)

We consider a setting of dual practice, where a physician offers free public treatment and, if allowed, a private treatment for which patients have to pay out of pocket. Private treatment is superior in terms of health outcomes but more costly and time intensive. For the latter reason it generates waiting costs. As patients differ in their propensity to… (More)

We analyze the deficits of the German Länder for the period from 1960 to 2005 and test a number of hypotheses derived from the literature on the political economy of public deficits. Estimating a dynamic panel data model, we find evidence for political opportunism in the spirit of Rogoff and Sibert: German voters seem to favor fiscal discipline as debt… (More)

This paper analyzes the interdependence between the firms' technology choice and innovation. Previous literature argues that product flexibility and product innovation are complements, because flexible machines handle a large variety of product designs with low changeover times. In a model where technology is chosen before uncertain demand is realized, we… (More)